News

Daily Newsletter - 30 July 2020

Summary

Macroeconomic News (2)

Public debt exploded this year

Romania's public debt rose to RON 428.3 billion in the first five months of this year, up RON 55 billion compared to the end of 2019, the equivalent of 39.9% of the GDP. Economic analysts consulted by ZF expect the public debt to continue to grow as the budget deficit rises in 2020, with little prospects for a change of trend in 2021.

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Insolvencies down 26.16% in H1, 2020

The number of insolvent companies and self-employed individuals reached 2,360 in the first six months of 2020, down 26.16% from the corresponding period of last year, according to data published by the National Office of the Trade Register (ONRC). Bucharest reported the highest number of insolvencies in the country: 423 - down 23.23% compared to January-June 2019.

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Financial News (4)

Interest rates are falling

The cost of credit was one of the main topics at the ZF Bankers 2020 summit, along with requests to have the National Bank of Romania (BNR) slash the key rate even further. The decision to bring the key rate down from 2.5% to 2% and, later, to 1.75%, has helped decrease the active interest rates for both retail and business loans.

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Around 2,000 companies bought commercial credit insurance

Commercial credit insurance covers the provider's risk of unpaid services and ensures that business can continue uninterrupted by securing 85-90% of the value of unpaid debts. The number of companies that bought such policies is around 2,000, given the difficult situation created by the COVID-19 pandemic, according to Eugen Anicescu, country ma�nager of Coface Romania.

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Gold rises to new high

The National Bank of Romania (BNR) announced that the price of gold has risen to a new high of RON 258.84 per gram, up from the previous day's RON 256.15. The reference exchange rate is RON 4.8342 per EUR.

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IMM Leasing program to start on August 15

The IMM Leasing program, which will allow companies to secure state guarantees for acquisitions of equipment of tools, will begin on August 15, according to Dumitru Nancu, head of the National SME Loan Guarantee Fund (FNGCIMM).

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Investment News (2)

EUR 300 million to be invested in Victoriei Road hotels and office buildings

Bucharest's Victoriei Road, a 2.8-kilometer street linking Victoriei Square to the United Nations Square, will continue to develop as an office and hotel hotspot in the coming years. Developers are planning to build seven new office buildings and six new hotels on the street, boasting a combined value of more than EUR 300 million, according to real estate consulting firm Cushman & Wakefield Echinox.

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Transelectrica resumes work on Oradea-Nadab line

Electricity transport company Transelectrica has signed the contract that would restart work on the Oradea Sud-Nadab line, part of the Oradea-Bekescsaba 400 kV power line. The project is worth a total of RON 4 million and has been suspended since 2008.

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Legislative News (1)

PNL wants official state symbols on food

After the European Union shot down the Social Democrats' (PSD) push for mandatory quotas of Romanian products in stores, the National Liberals (PNL) came up with a bill to put national and state symbols on food.

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Politics (2)

President rejects election delay

President Klaus Iohannis said the country needs to hold the local and parliament elections this year, without any delays. The president added that the Parliament had placed itself in a conflict of interests when it took upon itself to decide the parliament election day.

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PSD accuses PNL of stealing pension money

The Social Democratic Party (PSD) has accused the National Liberals (PNL) of having stolen the pension and state aid money through corrupt contract tenders, and that the Court of Accounts had confirmed PNL's "thefts". According to the PSD, the Court of Accounts had found greatly inflated prices that give huge profits to companies with ties to PNL.

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Social (2)

Romania to buy COVID-19 vaccine

President Klaus Iohannis said on Wednesday that the authorities are planning to purchase Remdesivir, the vaccine against COVID-19, as well as any other effective medication, to the extent that such products are available.

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State aid for children to increase 20%

The state aid for children will go up 20% in September, followed by four more 20% increases on January 1 and July 1 of both 2021 and 2022. The schedule was included in a draft decree.

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